LAPTOP COMPUTERS STAND TALL AT LAST They're more portable and more powerful than ever. Big companies are now buying them by the thousands for traveling managers, engineers, auditors, and salesmen.
By Michael Brody REPORTER ASSOCIATE Darienne L. Dennis

(FORTUNE Magazine) – SECURITY ANALYSTS and the trade press are proclaiming that the portable computer market is finally taking off. Yes, you have heard that before. But this time they may be right. Thanks to screens that are as legible as monitors ! on office terminals, microprocessors as powerful as those in the best desktop machines, and vastly improved memory capacity, megaorders for laptop computers are pouring in from such big customers as the Pentagon, Eastman Kodak, Ciba- Geigy, and Touche Ross. Zenith Data Systems has a $104 million contract to supply the Defense Department over the next three years with as many as 90,000 laptops, battery-powered machines that fold up to briefcase size. Other portable makers are taking orders -- for several thousand machines at a clip -- from companies equipping sales forces, engineers, field auditors, and traveling executives. Willy Loman is no longer out there on nothing but a smile and a shoeshine. After two years of evaluating available hardware and software, and figuring out just how their salespeople would make use of the machines, Ciba-Geigy is providing up to 1,000 pharmaceutical salesmen and sales managers with nine- pound laptop computers from GRiD Systems Corp., a small company in Fremont, California. (GRiD's powerful new 1530 is the machine of the moment; for a guide to which portables are best suited to various users, see box.) Kodak bought about 2,000 Zenith laptops last year to computerize its customer service engineering division. It also gave around 500 Toshibas to managers for their business trips and weekend work. Compaq Computer Corp.'s ''luggable'' -- at 20 pounds, it is portable but too big and heavy to balance on a lap -- is now standard equipment for 4,000 field auditors at Arthur Andersen. Metropolitan Life has started equipping its sales force with over 2,000 Zenith Z-183 laptops, replacing slower machines from NEC and Data General. Industry analyst Peter Teige of Dataquest, a market research firm in San Jose, California, says a wave of pilot projects has convinced companies that portables can do a lot of the legwork for salespeople, and that communications software can tie them efficiently to head-office data banks and electronic mail systems. Ciba-Geigy tried out four different types of computers, testing each in the field under firing-line conditions to determine the relative importance of such characteristics as size, speed, weight, and screen legibility. The company's goal: improving productivity by reducing paperwork and organizing the salespeople's routine more efficiently. Field forces are responsible for up to 40% of a company's cost of doing business, according to the Conference Board, and they are one of the last major corporate sectors to be computerized. Even a small sales productivity increase, through speeded-up paperwork and order flow, can bolster the bottom line. Portable computers still account for only an estimated $2.5 billion of the $35-billion-plus worldwide personal computer market, according to Dataquest. Over the past two years, international sales of high-end laptops -- powerful portables that are also light enough to carry around easily -- have tripled, to almost half a million units annually; at the same time, both the bulkiest and the smallest, least versatile machines have given up market share. DURING the coming two years, while powerful personal computers and workstations continue to take sales away from office mainframes and minicomputers, Dataquest predicts that the new portables will claim more than 10% of the PC market. Venture Development Corp., a market research firm based in Natick, Massachusetts, has just completed a lengthy laptop market analysis; it projects double-digit annual revenue growth at least through 1992. Portable computers range in size from the boxy, versatile 20-pound luggables pioneered by Compaq to small note-taking units like the 3 1/2-pound Tandy Model 102. But power, not size, divides the market into two tiers. Word- processing software for writing reports -- together with programs that plan schedules, keep expense accounts, and transfer data over phone lines for display on the screen -- requires no more computing power than the Intel 8088 microprocessor contained in the original IBM PC. But to run spreadsheet programs like Lotus 1-2-3 at high speed, traveling managers need machines based on the more advanced Intel 80286 microprocessor; the company's new 80386 version is a further upgrade. These high-end machines include both luggables and some of the newer, larger laptops, which in the past year have evolved to the point where they can do anything a desktop computer can. Compaq still dominates the top-end, ''power-user'' market tier. It is the biggest portable manufacturer, and the manufacturer of the biggest portables: Its machines offer all the features of a desktop computer, including 5 1/4- inch-diameter floppy disks. (All other portables use the 3 1/2-inch disks that IBM has adopted as standard for its new PS/2 desktop machines.) The upper end of Toshiba's laptop line is challenging the industry leader, and new machines from Zenith, GRiD, NEC, Sharp, and Samsung could grab significant market shares. $ The second tier of mass-market machines -- generally smaller, lighter, battery-powered, and less versatile -- has been aimed primarily at the far- flung salesman or executive who simply needs a terminal for word processing and entering and displaying data. While portability and battery power are important for that kind of work, it does not usually require high-speed number-crunching capability -- though these machines can handle spreadsheet programs when necessary.

IBM TRIED TO corner this well-populated lower end of the market with the slow, clunky PC Convertible, introduced in 1986. When that machine failed to catch on, Zenith, with the first highly readable liquid crystal display (LCD) screen, quickly became the market leader. Its dramatic blue-on-white LCD screen combines a sophisticated version of the displays in digital watches with electroluminescent backlighting, which throws characters on the screen into sharper relief. The sudden surge in the sales of portables would not have happened without the technological improvements that are giving these computers the power and capability of office desktops. Portable computers, from such manufacturers as Osborne and Epson, were around even before IBM delivered its first PC in 1981. But until recently most of the smaller laptop models were hampered by unreadable screens, poorly laid-out keyboards, and limited computing power and memory. Within the past two years, screen problems have been largely eliminated. Compaq, Toshiba, GRiD, and Data General all offer gas-plasma or electroluminescent screens, with startling orange-on-black and yellow-on-black displays equal in clarity to those of standard monochrome monitors. Gas-plasma displays are expensive, consume lots of battery power, and wash out in bright light. Zenith's cheaper blue-on-white LCD screens are somewhat fuzzier, but they use much less power and work well in bright light. So-called active matrix LCD screens, which turn each crystal on and off independently, are expected to give LCDs the same high contrast as monochrome monitors within the next year or two. Some analysts look for color LCD screens as sharp as color monitors in two to three years. DATA HANDLING on portables is also far easier than it used to be. Keyboards, though usually smaller than those of standard desktops, have similar features; for example, several portables offer separate keypads for entering numbers. Ten- or 20-megabyte hard disks, which give portables the storage capacity of a desktop PC, are now widely available, though most portables that use them cannot retrieve the information stored as quickly as desktop models. Several portables permit software programs and databases -- insurance agents' rate tables, for example -- to be ''burned into'' memory chips. That way they can be called to the screen at the touch of a key, making extra disks unnecessary. Optional built-in modems, for high-speed data transmission over telephone lines, are commonplace; so are connection ports for printers and color monitors. And top-of-the-line machines now offer slots for controller cards so that they can be plugged into local area networks back at the office. Until recently none of the top-tier portables could run on batteries, making them useless in cars, on commuter trains, aboard airplanes, and in airport waiting areas. But a recent microprocessor design, along with new arrays of subsidiary chips that draw less electricity, will soon make battery operation standard and cut the prices of 80286- and 80386-based machines, according to industry watcher David Carnevale of InfoCorp., in Cupertino, California. Chrysler became one of the first major corporations to provide sales, service, and parts managers with computers, 2 1/2 years ago. GRiDCase III portables allowed them to set up an electronic mail service and circulate data quickly about car and truck inventories. Paul Berrigan, manager of sales management information, says wryly that, on a short-term rate-of-return calculation, ''I think the computers are absolutely not cost-justifiable. You're talking about an initial purchase of 600 to 700 machines, and they were very expensive. Communications, programming support, training -- it cost a fortune.'' But long term, he explains, ''Chrysler had a vision of the way we wanted to change the culture of our field force: from clerical people who went around and picked up sales reports and orders, to business consultants. So we didn't try to justify the expense based on manpower reductions or savings on other costs. We did it because we were trying to change the way we were doing business.'' In 1987, when the company bought American Motors, Chrysler brought AMC's entire field force into its computerized service system, which now operates from more than 1,100 laptops. The portable market offers so many good machines that even firms with presumably similar needs -- such as the Big Eight accountants Arthur Andersen and Touche Ross -- can go in different directions. Pat Condon, who heads the Arthur Andersen group in Chicago that works on computerized auditing techniques, describes the firm's audit division as a ''Compaq shop.'' Field auditors, who are now using about 4,000 of the machines, came down strongly in favor of desktop-equivalent computers with standard keyboards and maximum processing power. Across town, Touche Ross has opted for Toshiba T3100s to equip over 300 management consultants and audit managers. The firm reports a ''tremendous'' payoff in productivity, and is moving toward computerizing 6,000 to 8,000 field auditors as well. Ray Bolek, a partner at the firm, notes that when Touche Ross consultants are struggling through airports with a briefcase, a carry-on luggage bag, and a computer, the difference in weight and bulk between the slimline 15-pound Toshiba and the boxier 20-pound Compaq is significant, especially when 40% of those consultants are women who may weigh only 100 pounds themselves.